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Escrow Agreement - MID STATE RACEWAY INC - 5-14-2004

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Escrow Agreement - MID STATE RACEWAY INC - 5-14-2004 Powered By Docstoc
					                                                 Exhibit 10.11

                                          ESCROW AGREEMENT

ESCROW AGREEMENT, dated as of April 10, 2004, by and among RACEWAY VENTURES, LLC, a
Florida limited liability company, having an address at 5300 N.W. 12 Avenue, Suite 1, Fort Lauderdale, Florida
33309 ("PURCHASER"); VESTIN MORTGAGE, INC., a Nevada corporation, having an address at 2901 El
Camino Avenue, Suite 206, Las Vegas, Nevada 89102 ("VESTIN"); AND RICHARD M. MOGERMAN,
P.A., an Attorney having an address at 150 South Pine Island Road, Suite 130, Plantation, Florida 33324
("ESCROW AGENT").

                                               BACKGROUND

Vestin is a creditor of MID-STATE RACEWAY, INC. ("MSRI") AND MID-STATE DEVELOPMENT
CORPORATION, both of which are New York corporations. Purchaser intends to acquire a majority equity
interest in MSRI and has requested Vestin's consent to such acquisition. Vestin is willing to consent to such
acquisition subject to, among other things, the execution, delivery and performance of this Escrow Agreement by
Purchaser and the Escrow Agent.

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as
follows:

1. Payment of Funds to Escrow Agent. Purchaser has deposited the sum of One Million Two Hundred Eighty
Four Thousand Nine Hundred Fifty Dollars ($1,284,950.00) (the "Escrow FUND") in cash with the Escrow
Agent. The Escrow Agent acknowledges that Escrow Agent has received the Escrow Fund and is holding the
Escrow Fund subject to the provisions of this Escrow Agreement.

2. Return or Release of Escrow Fund.

(a) The Escrow Agent shall return the Escrow Fund to Purchaser if the closing of Purchaser's acquisition of a
majority equity interest in MSRI has not been consummated on or before APRIL 12, 2004.

(b) If the closing of Purchaser's acquisition of a majority equity interest in MSRT has been consummated on or
before April 12, 2004: (i) the Escrow Fund shall be paid by the Escrow Agent to MSRI no later than May 12,
2004 by a wire transfer to an account of MSRI designated by Steven F. Cohen or by a check payable to the
order of MSRI which is delivered to Steven F. Cohen; and (ii) Purchaser shall cause MSRI to use the Escrow
Fund (i.e., the sum of $1,284,950 received from the Escrow Agent) to pay or settle outstanding accounts that are
due and payable by MSRI as of the date of closing of the acquisition. Notwithstanding the foregoing, MSRI shall
have the right to contest in good faith the amount and/or legitimacy of any account claimed to be payable by
MSRI so long as MSRI acts in a commercially reasonable manner and
reserves an amount sufficient to cover the amount reasonably projected to be due should the contest be
unsuccessful. Any balance of the funds received from the Escrow Fund remaining after such payment and
establishment of such reserves may be used and applied as unrestricted working capital by MSRI.

(c) Any breach by Purchaser of its obligations under this Agreement that is material and that is not promptly
cured shall constitute a material breach of Purchaser's obligations to Vestin under a Guaranty by the Purchaser in
favor of Vestin, and shall entitle Vestin to claim and pursue any and all rights and remedies against Purchaser and
others following such breach.

3. Concerning the Escrow Agent.

(a) The Escrow Agent shall be entitled to reasonable compensation, as may be set forth in a separate letter from
the Escrow Agent for his services hereunder and shall be reimbursed for all reasonable expenses, disbursements
and advances (including reasonable attorneys' fees actually incurred by the Escrow Agent in connection with the
use of outside attorneys) (collectively, the "Escrow AGENT Fees") incurred or made by him in performance of
his duties hereunder on or after the date hereof. All of the Escrow Agent Fees shall be paid by Purchaser. The
Escrow Agent may resign and be discharged from its duties hereunder at any time by giving notice of such
resignation to the Purchaser and Vestin specifying a date (not less than 30 DAYS after the giving of such notice)
when such resignation shall take effect, provided, however, that the Escrow Agent shall continue to serve until his
successor accepts the escrow and receives the funds deposited with the Escrow Agent. Promptly after such
notice, a successor escrow agent shall be appointed by mutual agreement of the Purchaser and Vestin, such
successor escrow agent to become Escrow Agent hereunder upon the later of the resignation date specified in
such notice or the acceptance of the escrow and the receipt of the escrowed funds by the successor Escrow
Agent. The Purchaser and Vestin may agree at any time to substitute a new escrow agent by giving notice thereof
to the Escrow Agent then acting.

(b) The Escrow Agent undertakes to perform only such duties as are specifically set forth herein. The Escrow
Agent acting or refraining from acting in good faith shall not be liable for any mistake of fact or error of judgment
by him or for any acts or omissions by him of any kind unless caused by willful misconduct or gross negligence,
and shall be entitled to rely and shall be protected in doing so, upon any written notice, instrument or signature
reasonably believed by him to be genuine and to have been signed and presented by the proper party or parties
duly authorized to do so. The Escrow Agent shall have no responsibility for the contents of any writing submitted
to him hereunder and shall be entitled in good faith reasonably to rely without any liability upon the contents
thereof.

(c) Purchaser agrees to indemnify the Escrow Agent and hold him harmless against any and all liabilities incurred
by him hereunder, except for liabilities incurred by the Escrow Agent resulting from his own willful misconduct or
gross negligence.
4. Miscellaneous.

(a) This Escrow Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties
hereto and their respective heirs, beneficiaries, representatives, successors and assigns.

(b) This Escrow Agreement contains the entire agreement and understanding of the parties with respect to the
subject matter hereof, supersedes all prior or contemporaneous agreements with respect to such subject matter
and may be amended only by a written instrument duly executed by all the parties hereto.

(c) All notices, claims, requests, demands and other communications hereunder ("NOTICES") shall be in writing
and shall be given as follows:

                    To Vestin:                    Vestin Mortgage, Inc.
                                                  2901 El Camino Avenue, Suite 206
                                                  Las Vegas, NV 89102
                                                  Attn:    Daniel B. Stubbs, Senior
                                                           V.P. - Underwriting
                                                  Phone:   (702) 227-0965
                                                  Fax:     (702) 221-2537

                    To Purchaser:                 Raceway Ventures, LLC
                                                  5300 N.W. 12 Avenue, Suite 1
                                                  Fort Lauderdale, Florida 33309
                                                  Fax: 954-776-8578

                    To Escrow Agent:              Richard M. Mogerman, P.A.
                                                  150 South Pine Island Road, Suite 130
                                                  Plantation, FL 33324
                                                  Fax: 954-475-2212




(d) This Escrow Agreement shall be governed by and construed in accordance with the laws of the State of
Nevada. This Escrow Agreement may be executed in one or more original or faxed counterparts, each of which
shall be deemed an original but all of which together shall constitute one of the same instrument.

IN WITNESS WHEREOF, this Escrow Agreement has been duly executed and delivered by or on behalf of the
parties hereto as of the date first above written.

                                       RACEWAY VENTURES, LLC,
                                        a Florida limited liability company

                                           By:/s/ Steven F. Cohen
                                           Name: Steven F. Cohen
VESTIN MORTGAGE, INC.,
   a Nevada corporation

 By: /s/ Daniel B. Stubbs
    -----------------------
 Name:




    ESCROW AGENT:

/s/Richard M. Mogerman, P.A.
Richard M. Mogerman, P.A.
                                                   Exhibit 10.12

                                        QUIT CLAIM ASSIGNMENT

FOR VALUE RECEIVED, the undersigned All Capital LLC (the "Assignor") does hereby transfer, sell, assign
and convey unto Raceway Ventures, LLC (the "Assignee") all of the right, title and interest of the Assignor in and
to the right of the Assignor to designate 6 nominees to the Board of Directors of Mid-State Raceway, Inc.
("Mid-State") as set forth in Paragraph 3 of that certain First Amendment to Loan Agreement dated June 30,
2003 between Assignor and Mid-State (the "First Amendment"), a copy of which is annexed hereto.

Except as herein expressly provided to the contrary, the within assignment is being made by the Assignor (and
accepted by the Assignee) without representation, warranty, covenant or agreement of any kind nature or
description, including without limitation the right or ability of the Assignee to exercise and/or enforce the rights
herein assigned. Assignor represents that:
(a) prior to the date hereof the Assignor has not transferred, sold, assigned or conveyed the First Amendment
and/or any interest therein and/or the right herein assigned, and/or any interest therein, to any person and/or
entity; (b) the execution, delivery and performance of this Assignment is within the power and authority of the
Assignor, has been authorized by the taking of all required actions and does not violate the constitutional
documents of the Assignor, and
(c) from and after the date hereof the Assignor shall not exercise or attempt to exercise the within assigned right.

IN WITNESS WHEREOF, the Assignor has executed this Quit Claim Assignment this 10th day of April, 2004.

                                                 All Capital, LLC

                                             By: /s/ Shawn Scott
                                                -------------------

                                             Name: Shawn Scott
                                                     Exhibit 10.13

                                          QUIT CLAIM ASSIGNMENT

FOR VALUE RECEIVED, the undersigned Shawn Scott ("Scott") All Capital LLC ("All Capital"), Vernon,
LLC ("Vernon") and Capital One LLC ("Capital", and Scott, All Capital, Vernon and Capital One collectively
the "Assignor") does hereby transfer, sell, assign and convey unto Raceway Ventures, LLC (the "Assignee") any
and all rights of every kind, nature or description, if any, which Assignor has to provide debt or equity financing to
Mid-State Raceway, Inc.

Except as herein expressly provided to the contrary, the within assignment is being made by the Assignor (and
accepted by the Assignee) without representation, warranty, covenant or agreement of any kind nature or
description, including without limitation the existence of the rights herein assigned and/or the right or ability of the
Assignee to exercise and/or enforce the rights herein assigned. Assignor represents that: (a) prior to the date
hereof the Assignor has not transferred, sold, assigned or conveyed the right herein assigned, and/or any interest
therein, to any person and/or entity; (b) the execution, delivery and performance of this Assignment is within the
power and authority of the Assignor, has been authorized by the taking of all required actions and does not
violate the constitutional documents of the Assignor, and
(c) from and after the date hereof the Assignor shall not exercise or attempt to exercise the within assigned right.

IN WITNESS WHEREOF, the Assignor has executed this Quit Claim Assignment this 10th day of April, 2004.

                                                   All Capital, LLC

                                              By: /s/ Shawn Scott
                                                 -------------------
                                              Name: Shawn Scott




                                                     Vernon LLC

                                              By: /s/ Shawn Scott
                                                 -------------------
                                              Name: Shawn Scott




                                                  Capital One LLC

                                            By: /s/ Shawn Scott
                                               -------------------
                                            Name: Shawn Scott

                                            /s/ Shawn Scott
                                            -----------------------
                                            Shawn Scott, Individually
                                                     Exhibit 31.1

Certification of Chief Executive Officer

I, Steven F. Cohen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Mid-State Raceway, Inc. and Subsidiary;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly
report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies
and material weaknesses.

                                              Date: May 14, 2004




                                              /s/ Steven F. Cohen
                                              Chief Executive Officer
                                                     Exhibit 31.2

Certification of Chief Financial Officer

I, William B. Thornton, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Mid-State Raceway, Inc. and Subsidiary;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly
report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies
and material weaknesses.

Date: May 14, 2004

William B. Thornton
Chief Financial Officer and Treasurer
                                                     Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

I, Steven F. Cohen, Chief Executive Officer of Mid-State Raceway, Inc. and Subsidiary (the "Company"),
certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2003 (the "Report")
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

Date: May 14, 2004

Steven F. Cohen
Chief Executive Officer
                                                     Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

I, William B. Thornton, Chief Financial Officer and Treasurer of Mid-State Raceway, Inc. and Subsidiary (the
"Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2003 (the "Report")
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

Date: May 14, 2004

William B. Thornton
Chief Financial Officer and Treasurer